14 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 AUGUST 2023 for the Chinese legal services industry. As a result, China’s legal profession, already highly competitive, has experienced involution, or excessive internal competition, that is not conducive to development. Already a full-service outfit, Hylands managed to maintain its growth momentum over the past 12 months, with feeearners up by 530 to reach 2010, new offices established in Fuzhou, Nanchang, Xi’an, Suzhou, Zhengzhou, Shijiazhuang, Taiyuan, as well as Miyun District and Changping District of Beijing, and a significant increase in revenue. Based on performance of the firm’s headquarters and more than 30 offices in the first half of this year, Jiang expects the growth of revenue to be maintained. These achievements are inseparable from the efforts made by the firm in recent years to build up middle office services and branding. “Hylands has presented itself with a brand new look in the world of Chinese law firms.” SYSTEM AND MANAGEMENT The gains brought about by strength in numbers point to the driving role of scale in the development of Chinese firms. Faced with fierce competition, many firms are emphasizing the importance of staying prudent and pursuing moderate and high-quality upscaling. To this end, the 15 winning firms have all worked hard in terms of systems and management. Switching from general partnership (GP) to special general partnership (SGP) is a clear path chosen by many of the winners, such as JAVY, Ronly & Tenwen, Beijing Celue Law Firm and Chance Bridge Law Firm. The biggest difference between GP and SGP lies in the debt liability of law firm partners, which improves a firm’s ability to withstand risks. Cao of JAVY says that the restructuring of the firm to a SGP in 2021 is a key milestone in the firm’s development and provides the institutional guarantee for its rapid growth. “SGP solves the worries of partners in terms of liability sharing, creating the basic conditions for all partners to build a business platform together.” On this basis, JAVY has made it clear in its first “Five-year Plan” that it will transition from a specialized boutique firm to a large-scale, one-stop firm. Although Hylands still adopts the GP model, Jiang concedes that the underpinning philosophy and basic logic of a partnership firm is that lawyers will work and do things for their own benefit, resulting in an inherent lack of organizational capabilities of the firm. “The tension between our lawyers’ growing professional competence and creativity and our firm’s lack of organizational capabilities is something we need to address urgently.” When it comes to the organizational structure of law firms, Jiang hopes that China could introduce limited liability partnership or LLP which would contribute to the upgrading of law firm management. “The risk of unlimited joint liability is like the sword of Damocles, hanging over the heads of 650,000 Chinese lawyers. The LLP model, on the other hand, advances joint management through the proportionate system, which can improve management efficiency and strengthen organizational capabilities.” At the management level, both JAVY and Hylands have established a system comprising “discussion, decisionmaking, execution and supervision”. JAVY’s Cao shares that “discussion” aims to reflect democracy in its broadest and most sufficient sense. The firm has set up an executive committee, an organizational strategy and development committee, an institutional development and coordination committee, and a partnership affairs committee, to study major issues that emerge out of the firm’s operations and management. Before decisions on major matters that affect the firm are made, all employees are organized to participate in internal consideration, communication, discussion and research. “Decision-making” is to improve the democratic decision-making mechanism featuring democratic discussion and voting. JAVY practices threetier decision-making partner meetings, namely meeting of all partners, meeting of senior equity partners, and meeting of the partner management committee. Further, “execution” is to step up implementation efforts. At JAVY, the partner management committee elects COVER STORY BEIJING CELUE LAW FIRM 北京策略律师事务所 BEIJING DOCVIT LAW FIRM 北京市道可特律师事务所 BEIJING HYLANDS LAW FIRM 北京浩天律师事务所 BEIJING JAVY LAW FIRM 北京嘉维律师事务所 CHANCE BRIDGE LAW FIRM 卓纬律师事务所 CHINA COMMERCIAL LAW FIRM 华商律师事务所 GLINKS LAW FIRM 上海格联律师事务所 HAI RUN LAW FIRM 海润天睿律师事务所 HUNAN TIANDIREN LAW FIRM 湖南天地人律师事务所
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